R800m Oxygen Tender Fraud Exposed by Minister Macpherson

(The Post News)– Minister of Public Works and Infrastructure Dean Macpherson has disclosed serious irregularities and fraudulent activity following a forensic probe into the R800 million Pressure Swing Adsorption (PSA) Oxygen Plant contract, a key initiative intended to bolster South Africa’s public healthcare infrastructure.

In a media briefing on Tuesday afternoon, Macpherson confirmed that the controversial tender was issued by the Independent Development Trust (IDT) and that the investigation had revealed widespread misconduct, procedural violations, and entrenched corruption. The inquiry, led by international consultancy PricewaterhouseCoopers (PwC), followed extensive examination of procurement anomalies involving IDT officials.

According to the minister, the findings demonstrated not only severe governance lapses but also deliberate fraud, which has compromised the agency’s operations for years and placed public health delivery at risk.

When I assumed this portfolio, I was made aware of persistent allegations of corruption, mismanagement, and financial discrepancies at the IDT, Macpherson explained. This investigation has now confirmed those concerns and revealed the extent to which the agency’s credibility and performance have been eroded.

The forensic report found that tenders were frequently awarded without the required documentation, valid contact details, or evidence of operational capacity. In one notable case, a bidder submitted an application lacking a physical address and without necessary regulatory approval. Macpherson described such actions as clear-cut fraud.

One of the most serious findings involved Bulkeng (Pty) Ltd, which submitted a SAHPRA license belonging to Atlas Copco Industrial SA without permission. Bulkeng also failed to disclose its plan to subcontract over 25 percent of its obligations to Brutes Air Solutions, violating key procurement regulations.

Further scrutiny revealed that an essential SAHPRA compliance requirement, originally included in both the Project Execution Plan and the Department of Health’s Memorandum of Agreement, was intentionally removed from the final Request for Proposals, RFP. This omission enabled unqualified bidders to receive contracts worth over R428 million, significantly exceeding Bulkeng’s CIDB grading threshold of R200 million.

The investigation also highlighted missing records, lack of transparency, and incomplete procurement processes. Macpherson pointed out that the project’s original budget of R216 million escalated to more than R590 million without any documented approval.

He stated that failures in leadership extended to the upper echelons of the IDT. For an extended period, the IDT’s board did not meet the required quorum, internal audit functions were inactive, and overall record-keeping was inadequate.

Macpherson directly criticized CEO Tebogo Malaka for failing to oversee procurement properly. Despite multiple warnings from the Department of Health, she failed to take action, neglected to verify documentation, and did not convene risk management committees, instead allowing defective processes to continue.

The report also implicated Dr. Molebedi Sibi, the IDT’s General Manager for Supply Chain Management, for providing misleading assurances. Despite being alerted by the Department of Health, he opposed the cancellation of the procurement process and falsely claimed compliance, even though key legal requirements, such as valid SAHPRA licenses, had not been met.

Macpherson clarified that no Global Fund resources were used for this project, which allowed the government to act swiftly in safeguarding external donor funds. He confirmed that procurement for the oxygen systems has now been transferred to the Development Bank of Southern Africa, DBSA, to prevent further delays.

Disciplinary action has already commenced against Malaka, Sibi, and other officials implicated in the findings. The matter has also been referred to the Hawks for criminal investigation, with the goal of ensuring full accountability and justice.

Macpherson outlined immediate steps to address the situation. These include disciplinary proceedings against Malaka for validating a flawed procurement process and for improperly appointing Department of Health staff as decision-making members rather than observers. Dr. Sibi will also face consequences for urging stakeholders to proceed despite clear violations of procurement law.

A comprehensive review of procurement practices will be undertaken to ensure that proper documentation, legally compliant committee structures, and regulatory standards are strictly followed in the future. Macpherson also proposed skills development and governance training for supply chain staff to enhance capacity and prevent similar issues.

This matter is not limited to a single contract, Macpherson stressed. It reflects our broader commitment to building the nation we aspire to govern ethically and effectively. He reiterated that the government remains determined to confront corruption and restore public confidence.

The minister also confirmed the installation of a permanent IDT board, led by Chairperson Zimbini Hill and Deputy Chair Professor Raymond Nkado, with the express task of overhauling the institution. Macpherson commended Hill’s fortitude in the face of criticism fueled by both sexism and racism and expressed confidence that the new leadership would deliver on the investigation’s recommendations.

He concluded by affirming that today’s measures represent a decisive move towards transparent and accountable governance. Tolerating corruption threatens the very foundation of our democracy, undermines trust, and ultimately harms the citizens who depend on essential public services.

Journalist-Kgopotso@thepostnews.net